IMPORTANT POINT
Section 8(c)(i) of the Kerala Value Added Tax Act allows a dealer in cooked food and beverages to pay tax at a compounded rate on their total turnover, including other goods incidentally sold by them in the course of business.

JUDGMENT :

Dr. A.K.Jayasankaran Nambiar, J.

As the issue involved in all these revision petitions is the same, they are taken up for consideration together and disposed by this common judgment.

2. The brief facts necessary for the disposal of the O.T. Revisions are as follows:

The revision petitioner before us was a dealer in bakery products and beverages, most of which were prepared by him and sold through a commercial outlet owned by him in front of an amusement park. During the assessment years 2012-13, 2013-14 and 2014-15, the petitioner had opted to pay tax on the goods sold by him from his outlet at the rate of 0.5% in terms of Section 8(c)(i) of the Kerala Value Added Tax Act (‘the Act’ for short). Section 8(c)(i) of the Act reads as follows:

Any dealer in cooked food and beverages, including beverages prepared by him, other than a dealer supplying cooked food or beverages to any airline service company or institution or shipping company for serving in air craft, ships or steamer or served in air craft, ship, steamer, bar attached hotel or star hotel may, at his option, instead of paying tax in accordance with the provisions of sub-section (1) of section 6 but subject to payment of tax, if any, payable under sub-section (2) thereof, paid tax at half percent of the turnover of cooked food and beverages prepared by him and also on the turnover of other goods in respect of which he is not the dealer effecting first taxable sale, as defined in the explanation under sub-section (5) of the section 6. Cooked food for the purpose of this clause shall include sweets and fresh fruit juice prepared and served in the restaurants and hotels.

3. The Assessing Authorities while completing the assessment found that out of the total sales turnover conceded by the petitioner, there was a certain portion of the turnover that pertained to sales of bakery products that had been purchased by the petitioner from other dealers within the State for the purposes of resale. The Assessing Authority was of the view that the second limb of Section 8(c)(i), which permitted an assessee opting to pay tax under Section 8(c)(i) to pay tax at 0.5% even on the turnover of other goods of which he was not the dealer effecting first taxable sales as defined in the explanation under Section 6(5) of the Act, would not apply to the petitioner since according to it, the other goods had also to be in the nature of cooked food and beverages.

4. The Assessing Authority therefore completed the assessment by subjecting the turnover of re-sale bakery products to the regular rate of tax under Section 6 of the Act and accepting the petitioner’s claim for payment of tax at the compounded rate under Section 8(c)(i) of the Act in respect of the remaining turnover.

5. In the appeal preferred by the petitioner before the First Appellate Authority, the said authority confirmed the order of assessment, but permitted the petitioner to avail input credit of the tax paid at the time of purchase of those bakery products including beverages on the sale of which he was required to pay tax at the regular rate under Section 6(1) of the Act.

6. In the further appeal preferred before the Appellate Tribunal, the Tribunal chose to affirm the findings of the authorities below and dismissed the appeal preferred by the petitioner. It is impugning the said order of the Appellate Tribunal, that the petitioner is before us through these O.T. Revisions by raising the following questions of law:

1. Whether the findings of the Tribunal that there is no merit in the contention of the appellant that he is eligible for payment of compounded tax @1/2% on the turnover of other packaged bakery items such as bread, jam, chocolate, ‘kurkure', etc produced by others and purchased by the revision petitioner from local registered dealers paying tax at their sale point, is correct in law?

2. Whether the findings of the Tribunal that the compounded rate of tax in terms of Sec.8(c)(i), is applicable only on the turnover of